Obama backs regulating ISPs like utilities

By Edd Gent

Published Tuesday, November 11, 2014

US President Barack Obama has called for Internet service providers to be regulated more like utilities, in a major boost to ‘net neutrality’ activists.

The president said the Federal Communications Commission (FCC) should make sure make sure ISPs grant equal access to all content providers, drawing intense protests from cable and telecoms companies and Republican law-makers.

The FCC received nearly 4 million comments after its chairman, Tom Wheeler, proposed new Internet traffic rules in May that would prohibit the ISPs from blocking any content but allowed content companies to strike 'commercially reasonable' deals to ensure their websites and applications load smoothly and swiftly.

But Obama said ISPs should be banned from striking paid 'fast-lane' deals with content companies and should be reclassified to face stricter regulations. He also said that the FCC’s new rules should apply equally to mobile and wired ISPs, with a recognition of special challenges that come with managing wireless networks.

"Simply put: no service should be stuck in a 'slow lane' because it does not pay a fee," Obama said in a statement released by the White House yesterday. "That kind of gate-keeping would undermine the level playing field essential to the Internet's growth."

Wheeler has pledged to police any such paid-prioritisation deals that would harm consumers, but public interest groups are wary of the proposed rules, which they say could relegate those that fail to pay for prioritisation to Internet 'slow lanes'.

Major ISP Verizon won a federal court case in January challenging the FCC's previous set of net-neutrality rules, which allowed "commercially reasonable" discrimination of traffic but indicated the FCC would disapprove of pay-for-priority deals.

The court supported the commission's authority to regulate broadband access but said the agency was applying stricter rules to ISPs than was warranted by the FCC’s classification of them as an information service.

Consumer advocates have for years pressed the FCC to reclassify broadband as a telecommunications service as a way to have more oversight authority, but ISPs have pledged they would fight the matter in court.

"Reclassification ..., which for the first time would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course," Verizon Communications said in a statement, adding that a "gratuitous" move to reclassify would probably not stand up in court.

AT&T, another major ISP, said it would expect to participate in a legal challenge.

Wheeler yesterday reiterated his opposition to Internet fast lanes or harmful prioritisation deals but said that approaches including reclassification of ISPs to regulate them more strictly raised legal questions.

"We must take the time to get the job done correctly, once and for all, in order to successfully protect consumers and innovators online," Wheeler said.

Obama and other White House officials acknowledged that the FCC, as an independent agency, would ultimately shape the regulations, but Republicans quickly seized on Obama's encroachment into its policy-setting process.

"The president's call ... would turn the Internet into a government-regulated utility and stifle our nation's dynamic and robust Internet sector with rules written nearly 80 years ago for plain old telephone service," said Senator John Thune, a Republican expected to lead the Senate Commerce Committee after the party won control of both houses of Congress in the recent mid-term elections.

Wheeler had originally pushed to reinstate net neutrality rules before the end of the year, but experts on Monday said the latest developments probably pushed the process into 2015.